Loading...
HomeMy WebLinkAbout2012-10-18 MinutesLioneld Jordan Chairman Sondra E. Smith Treasurer Fave e Eldon Roberts Secretary/Retired Position 1 ARKANSAS Policemen's Pension and Relief Fund Board of Trustees Meeting Agenda October 18, 2012 Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 18, 2012 Page 1 of 13 Jerry Friend Retired Position 2 Tim Helder Retired Position 3 Melvin Stanley Retired Position 4 Frank Johnson Retired Position 5 A meeting of the Fayetteville Policemen's Pension and Relief Fund Board of Trustees was held on October 18, 2012 at 3:00 PM in Room 326 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. Mayor Jordan called the meeting to order. PRESENT: Frank Johnson, Eldon Roberts, Melvin Stanley, Tim Helder, Jerry Friend, Mayor Jordan, Kit Williams, City Attorney, Sondra Smith, City Clerk, Lisa Branson, Deputy City Clerk, Elaine Longer and Kim Cooper, Longer Investments. ABSENT: None Approval of the Minutes: Approval of the July 19, 2012 meeting minutes Tim Helder moved to approve the July 19, 2012 meeting minutes. Jerry Friend seconded the motion. Upon roll call the motion passed 7-0. Approval of the Pension List: Approval of the November and December 2012 and January 2013 Pension Lists Mayor Jordan: Are there any changes Sondra? Sondra Smith: No, at this time there are no changes to the pension lists. Jerry Friend moved to approve the pension lists. Eldon Roberts seconded the motion. Upon roll call the motion passed 7-0. New Business: Revenue & expense report Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 18, 2012 Page 2 of 13 Sondra Smith: That is a copy of the report that we receive from Accounting that gives you an overall view of your revenue and expenses. Mayor Jordan: Are there any questions on that? Jerry Friend: We are glad to have it. Actuarial Valuation Report for December 31, 2011 A copy was given to the Board Sondra Smith: This report was emailed to you several months ago. It still shows that you have a large unfunded liability. The unfunded liability is on page 10. It shows you are only 36.7% funded. Your unfunded actuarial liability is $13,467,508 and you have $7,815,210 in assets. Jerry Friend: Shouldn't it be 50%? I don't know how they figure it. We have half as much as we need, right? Kit Williams: It is not as good as we would like it to be. Sondra Smith: You have only 36.7% as much as you need. Kit Williams: Except I think in this particular report they do not include the millage payments that you get every year. I don't know why they decided not to do that, those are surer than any return on investment which they do figure. This sounds worse than it really is because you will continue to get your .4 of a mill every year. Jerry Friend: I thought twice our assets are $16 million and our unfunded is $13 million. Kit Williams: I think your assets are listed best from the Accounting Department. For September 301h 2012 the market value of your assets is $8 million. Tim Helder: But we would have to come up with another $13.4 million to cover. Jerry Friend: Now I got you. Sondra Smith: They take all these assumptions and according to the assumptions you are going to need another $13.4 million. Eldon Roberts: In addition to what we already have. Sondra Smith: If everything works out like they think. Frank Johnson: Kit, what did you say that they didn't do? Kit Williams: My understanding is when they do this actuarial study for some reason they put in there what the board has said would be the rate of return on your investments. Which at one Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 18, 2012 Page 3 of 13 point they moved it up to 7% and I think we moved it back down to 6%, which is still a pretty good rate of return. Sondra Smith: It's 5% rate of return now. Kit Williams: Now it's at 5%. They are saying that whatever you have in the bank is going to appreciate 5% every year, they include that in but I do not think they include the money that you receive from the millage, which is .4 mills. The millage has consistently gone up and you're going to get it as long as this program is in existence. It was voted in by the people and we ask for it every year, we ask for the County to assess it and I think we have too. I don't know why they don't include that but I don't think they do and that will soften the blow dramatically. Frank Johnson: In terms of the 12% threshold to bring soundness to this. Sondra Smith: No, the millage will not bring soundness to this. Kit Williams: This makes it look more unsound than I think it really is. Eldon Roberts: They mention it on page six under income Employer contributions, Employer/Court Fines/Other, Insurance Tax and Local Millage. Kit Williams: It does say local millage. Do they include that in there? Eldon Roberts: I thought they took into consideration all income. Kit Williams: They should. It shows the millage. It's $500,000 a year. When they have come and talked to us I thought they said they did not include that. I could not understand why not, they should. Frank Johnson: I'm really confused now. Aren't there some standards that have to be applied to this? I'm not sure that $500,000 will make that much of a difference in the out come of their report but why wouldn't they include it? Kit Williams: I can not explain why they would not. Frank Johnson: Is there any standards that they are suppose to include it. Kit Williams: There is a state law that says it shall be assessed. Frank Johnson: The report is not accurate. Kit Williams: They do two different kinds of reports through the years. One is the twenty year cash flow method and they include it in that. I'm not sure how they do the cash flow method but it always comes a lot better than the actuarial plan. My understanding was one reason for that is they did not include the millage in the actuarial method. Maybe I am wrong, maybe they do. Sondra Smith: That is something we can find out. We will find out if the millage is included or not. Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 18, 2012 Page 4 of 13 Kit Williams: A half a million dollar payment a year is going to make a big difference, in the soundness of your fund. Frank Johnson: The soundness of the fund, just the flexibility of what we have to invest as well. It sounds arbitrary to me when you use one method. Eldon Roberts: I remember one time they were looking unfavorable at any income we had that could be changed by the political process and that would be insurance turn back. The legislatives in Little Rock could decide they want to put that money toward paving roads somewhere. Kit Williams: Or the State Police. Eldon Roberts: The local millage is the same way. At one time I thought they took a view of not counting that for sure because it could be changed. Kit Williams: There is no justification. I think they are really wrong on the millage. Sondra Smith: The only way the millage is going to get changed is if you all decide to go back and increase the millage and you might lose the millage because they might vote it down. That is the only way I know it is going to get changed. Eldon Roberts: The insurance turnback comes from the state. They are all the time changing the formula on it, who will get what. They can do about anything they want with it if they have the support for it. Sondra Smith: They have the supplement included in the income. Kit Williams: That's just reporting where it was in the past. It doesn't say included in the future. It reports what all the income was and you can see the income is not that far off from your expenses. Your expenses are running about $300,000 to $400,000 more than your income and you have about $8,000,000 in market value. That will eventually bring that down but not real fast. You all are in much better shape than the Fire. Sondra Smith: I will find out if the millage is included in there. On page 14 it gives a summary of your plan. How much your contribution was, how much your percentage is, the extra amount for anybody over 20 years of service and the amount for anybody over 25 years of service. That is always good information to have too. Northern Trust Letter from Michael McGee, Accounting Manager dated July 18, 2012 Discussion Items: Sondra Smith: That is a letter from Northern Trust saying that we are one of their clients and they want us to sign the attached letter and send it to Northern Trust. It says Northern Trust has our approval to include our organizations name on its representative client list and its news release. It goes on to say I understand this does not constitute an endorsement or recommendation by me ofNorthern Trust Services. Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 18, 2012 Page 5 of 13 I don't like to sign anything or have the mayor sign anything like that until you say it is okay Mayor Jordan: The mayor won't sign anything like that until you say it is okay. Sondra Smith: That's the reason it is in your packet. Jerry Friend: Is it a normal thing that people do? I hate to put our name on anything. Sondra Smith: We can ask Elaine Longer to make sure it's a normal process. Kit Williams: They just want to use it for marketing purposes. Eldon Roberts: I understand it doesn't constitute an endorsement or recommendation, but what do they want it for then. Kit Williams: It looks good. That is why they should be trusted because you can trust them. Eldon Roberts: That falls under endorsement or recommendation in my book. Frank Johnson: We are not responsible for the city's brand. I say we move on. Sondra Smith: Do you all want to wait and talk to Elaine about this when she gets here. Eldon Roberts: Absolutely. LOPFI Sondra Smith: I have been asked to leave that on the agenda. Kit Williams: Page four of the actuarial report talks about how to catch back up for the next five years would take a little over $3,000,000. Frank Johnson: Is that $3,000,000 total? Looking at it right now, I am not familiar with how this would be processed, but is that $3,000,000 in addition to what would be the annual contribution or less? Kit Williams: If you look at the heading of it, it says the following contribution level affects the payment of the current year normal costs for benefits contributed for the year. That is the whole cost for the benefits contributed for the year, plus amount sufficient to pay off the unfunded actuarial liability for a five year period. It would pay all the benefits this year plus five years of the part they say is unfunded. I think this year the payment was $1.3 million. That was how much was sent out so $1.7 million would be the unfunded actuarial cost for the next five years. Sondra Smith: We would be paying $3,000,000 a year for the next five years. Tim Helder: It says $13.4 million. Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 18, 2012 Page 6 of 13 Kit Williams: Oh that's right, over the next five years. You would have to pay $15,000,000 over the next five years. Sondra Smith: It is not saying you just throw in $3,000,000 and you're done. The way I am reading it they are saying you need that amount of money for five straight years to get you back to 100% funded. Jerry Friend: That amount plus the difference between what is coming in and what we pay which I think we pay out more than we get. Kit Williams: You have a sinking fund but its not sinking quit as fast. Tim Helder: I guess they are all designed to sink a little but the crystal ball tells us its sinking a little too fast. Eldon Roberts: The actuary said our job is to die and his job is to determine when. Sondra Smith: You all have to remember that doesn't work because your spouse gets the same benefits. Melvin Stanley: Who in their right mind would have ever passed 100% spousal benefits? Jerry Friend: I thought you voted for that. Melvin Stanley: No, I wasn't here. I would have never voted for it. Sondra Smith: I was very concerned about that. It's very difficult when you have a study done on the cash flow basis and you have actuaries telling you can do that. You need to blame the actuary. Jerry Friend: That was my problem they said "yes you can do that." Frank Johnson: Reflecting as much as I can from the minutes that it was the combination of the pension benefits and the spousal benefits together and they happened in a very short period of time. I think at some point invariably, this discussion is not one I want to have, but I think it is something that we need to have, if the motivation for what was being considered for the spousal benefits was to ensure families were taken care of then it seems like that same discussion should continue but in a different way in terms of the whole plan. We always get to this point where what authority are we going to give legislative to throttle this. Sondra Smith: If you think about, the thing to do if you are going to reduce benefits is, decrease the spousal benefits. Eldon Roberts: That is something I would say to do when it come to that time if it does. That is one of the things that will be on the very front burner to look at to see what kind of difference it would make by reducing their share by 15% to 25%. I agree with Melvin to some degree it's not going to cost as much for them to live with one person gone but the reason we did this is much like the reason we did a benefit increase. Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 18, 2012 Page 7 of 13 Sondra Smith: If you look back on your actuarial report on page 10, you can see exactly where you did the benefit increase. Eldon Roberts: We were at 102%. Sondra Smith: Then you drop down to 68.8%. That tells me something wasn't calculated right or something happened because it dropped quickly. Frank Johnson: To me that short discussion was very sufficient in just your saying if we get to that point that may be something we have to consider. If the board would consider a more formal structured dialogue about those things at least in that discussion, if we see that we need to socialize what could be considered with the beneficiaries we are way out in front of it, so it is not just a shock to them if something happens with the market where we are going to have to start doing some things. Eldon Roberts: That is one option we have on the table, to look at the spouse benefit, whenever we get to where we have too. Longer Investments: Longer View A copy was given to the Board Longer Investments 3rd quarter 2012 report A copy was given to the Board Longer Investments monthly report Elaine Longer introduced Derek Jackson, new to the firm and stated he is the accounting and systems manager. He does all of our trade settling, account reconciliation, technology over site, website and many other things. The portfolio appraisal for the September 30th statement you will see the equities have been trimmed back to about 41% with a 4.1% dividend yield. We've been emphasizing last year and this year with so much volatility in the market and so much uncertainty to maintain a high dividend yield high quality multi national corporations that are more defensive than just the average stock. You also have the growth and income section which is about 7.7% of portfolio and that yields 5.28%. That's largely composed of the utility fund and also the Guggenheim fund which holds stock and other high income assets that is growth plus income. If you consider the two together you are about 48% equities which is under the 50%. Bond funds are about 17% of the total portfolio yielding about 3.8%. Within the bond funds you will see that the shorter fund which is the seven to ten year bond fund represents about 2.7% of portfolio. That's really cash reserves for us. When we get a little bit of clearance on all of these Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 18, 2012 Page 8 of 13 macro risks, that we will talk about in a little bit, then we have cash in money market but we also have cash in these bonds funds to use to go more to the equity side of the portfolio. We have the GE Preferred and one of those is being called this month, unfortunately. The 6.625% coupon is being called. The next page shows the treasuries are 14.5% of total portfolio yielding 4.05% but if you look at the treasuries the one that we most recently purchased a couple years ago is the 4% due 2018. Now that interest rates in a 6 year maturity are about 0.8%, the bond has appreciated to 118.5 in market value. That is the volatility of bond prices in response to interest rate changes that we have talked about before. When interest rates are dropping it's a benefit you have 18% price appreciation while we have been earning 4% on the income yield. That can go the other way if interest rates start to go up. You still have 200,000 of the Federal Farm Credit 6.125% that is not maturing until 2015. Then we have the Gabelli Global Natural Resource Fund which is a fund that holds gold stocks and other natural resource stocks but also has an active options strategy against it so it yields 12%. In a bad market it acts like a stock not a bond so that's why you can't really put too much of a weight in there. We have it weighed at 1% of total portfolio. In the past quarter we had gone back into the Central Fund of Canada which is the fund that we use that is gold and silver and we had a pretty quick 17% pop on that and sold it. It has since backed off about 6% or 7% from where we sold it. We will look for another opportunity to go into it but gold is something that's tradable but when you get a quick return like that it doesn't pay dividends or interest so it's better to just book the gain. Cash is about 8.7% of portfolio and if you have been reading our newsletter you know that we are pretty cautious going into this year end with the fiscal cliff, the election and the Euro zone. Those of you that have watched us for years you know that this is a pretty high cash level for us. We have these limited partnerships that are gas pipe lines and they yield 6.81 % income yield but again it is like holding an individual stock security. You can't really overweight in any one area so the largest weight we have is 2%. The total portfolio value is just over $8 million. The income yield is at 4.1 % approximately. You have a portfolio that when you look at the pipe lines and you took at the stocks and income growth you're realty at about a 51% growth profile but you still have over 4% income yield. That has been our goal, we want to be able to participate in growth but do it in a way that we also have the income yield to support the portfolio if it gets a little bit jumpy out there. The next page shows the realized gains and losses year to date of $150,000. Income which is just dividends and interest income is about $158,000. The next page is a break down of the bond portfolio. The average yield to maturity has not changed much from December 31 which is 4.4%. The average maturity is only five years. To give you a relative comparison the current five year treasury is priced to yield 0.75%. You are in a five year maturity but you still have income locked in that is 4.4%. Approximately 30% of total bond holdings mature within the next five years. Anything that we are holding that's within a five year maturity is as good as cash to us. If we have an opportunity if interest rates should go higher and we can extend maturities or roll into higher interest rates than what we currently have got available we have the flexibility in the portfolio but at this point in time we are happy to be a little bit on the shorter end so that we have the income that's already locked in, bonds that were Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 18, 2012 Page 9 of 13 purchased earlier but we haven't really added to the fixed income side on the treasuries at these low interest rates. The next page through September 30, 2012 stocks are up 5.4%. The fixed income bond side of the portfolio is up approximately 5%. The other income assets which are the utility fund and the Guggenheim is up 7.2%. The total year to date is up about 5.9%. This year the stocks are trailing the index because we are still in the defensive posture. Last year they out performed the index which was flat and we were able to do 5.4% in the equities and 9.4% in the fixed income. This year they are lagging but we still feel that is a good place to be. We have plenty of flexibility should the market pull back and with a lot of the things we are looking at, I think that's a pretty good probability. Your annualized returns inception to date is still above that 6% that is the actuarial target that we started with. Your compound annual is 6.3%. The next page shows contributions and distributions for this year. Distributions for the year have been $621,000. No meaningful contributions except a class action law suit that yielded $7.63. The withdraws of $621,000 equal approximately 7.6% of beginning portfolio value at the start of the year. The next page shows the asset reconciliation this is inception to date from 1990. The beginning value $1.3 million. As other accounts were consolidated additional contributions have come in of $3.5 million and then other assets of $4.3 million. The total distributions during that time period from 1990 through September 2012 have been $9.3 million. That compares to an investment return of $8.1 million. The distributions even though the actuary rate of return assumption has been achieved the distributions have out run the net investment return by about $1.2 million. Jerry Friend: Why is there negative accrued income? Elaine Longer: If you pay above par value, for instances that 4% treasury we purchased a 103 and it is trading 118, then over the life of that bond they accrued the income negatively. It reduces the premium back to par over the life of the bond against the income that comes in. I wanted to bring a couple charts because there is so much of this in the news that I think it is real important to understand what is going on with the fiscal cliff. A number of cans have been kicked down the road and they all lie at the end of the road January 2013. There are a number of them. The alternative minimum tax was never indexed for inflation. What is happening now is more and more middle income families are being pushed into alternative minimum tax so congress keeps going and doing an annual patch or semi annual patch to alleviate that pressure on middle income families. If they were to totally throw the alternative minimum tax out then it would swell the projections of deficit to much going forward. What they keep doing is rolling it each year or so. That lies out there and expires in January. Some of the unemployment benefits expire in January, we've had payroll tax relief of 2% which was rolled again over Christmas but it expires in January and the Bush tax cuts expire in January. Last year in July to August there was the big attempt to balance the budget. I mean get into a more fiscal discipline and then they weren't able to arrive at the cuts that they were supposed to arrive at. The S&P downgraded America's credit rating and what happened was they moved that Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 18, 2012 Page 10 of 13 forward to November and put it under the care of a super committee to come up with a fiscal solution. They attached what is called sequestration cuts to enforce that or put a burden on the super committee to come up with these deficits reduction targets. The super committee couldn't do that so the sequestration cuts, which largely hit defense spending, kick in January 2013. The Obama care taxes kick in January 2013 which is 3.9% on dividends, interest income, capital gains and then also an additional .9% payroll tax. The combined total of all of this comes to about 4.5% of GDP. The problem with that you can see what a dramatic fiscal drag this is. It a combination of spending cuts and tax increases that give you an overall fiscal drag impact of about a negative 4.5%. When you are cruising along at a GDP growth rate of only 1.3% in the most recent second quarter, the economic risk to push the economy into recession is pretty significant. Congress adjourned and won't be back until after the election. There has been nothing done to address any of this in the past year. The problem with that is a lot of people are thinking surely they won't do that but the problem is that for it not to happen you have to bank on a lame -duck congress coming back into a shortened holiday session to address something that they haven't been able to address in two years and that's a lot to bank on. We are playing it pretty conservatively. I'm concerned that they are some lines in the sand being drawn that may make negotiations difficult in a lame -duck session. For instance today, President Obama said that if he is re-elected he would veto any lame -duck attempt at compromise that does not include increased tax rates on the wealthy. I hate to see lines in the sand being drawn because that kind of tells us that increase the risk that we don't address this before we go over the cliff. This is real important and you will hear a lot more about this as we move into the election season. Especially as we move into the lame -duck session. The next chart you will see money velocity is still falling. You see the Federal Reserve doing a lot of monetary stimulus. The QE1, QE2, QEOE is what they are calling it instead of QE3. Its QE open ended because basically they said they will just keep buying securities until unemployment improves but they didn't define what that means. Its kind of like quantitative easing open ended and why isn't it helping. We still have unemployment at approximately 8% and we have GDP growth rate for the 2nd Quarter revised down from 1.7% to 1.3%. Where is our money going? The problem is its not circulating through the economy. The velocity of money is the rate the money circulates through the economy. That happens largely through loan demand. It's as if someone came with a big dump truck and put a bunch of money in your front yard and you moved it with wheel barrels out to the back yard and buried it. It wouldn't create any jobs and it wouldn't create any additional wealth or any more income for you. So that's what's happening, you have the Fed feeding liquidity into the system but its not circulating. There's no loan demand and there's no confidence out there. I hear from my banker friends that the people that want to loan money to don't want to borrow and the people that want to borrow they don't want to loan money. The next thing is this deteriorating macro back drop. What is happening at the corporate level we are seeing in these earnings releases. IBM reported earnings yesterday and the stock is down about $17 a share since they reported. Google's numbers were light so it was down about $70 almost 10% intraday before they halted trading. What we see is there's a rise in the number of firms that are pre announcing disappointing numbers. Now we're seeing that the slow down in the international economies in particular China and Europe are affecting the ability of US Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 18, 2012 Page 11 of 13 Corporations especially those that are highly dependant upon exports. We are watching the earnings very carefully. The other chart we have goes back to the sixties and it shows the dividend yield on the S&P 500 and the relationship that it has relative to the 10 year treasury yield. What it says is at this point in time the dividend yield on the S&P 500, which at this point that this chart was prepared was about 2.25°/x, your dividend yield is 4.1% but the yield on the S&P 500 was about 2.25°/x. At that time the 10 year treasury was about 1.6%. You actually have dividend yields just on the basic S&P 500 that are 63 basis points or .65% above what you can achieve on the 10 year treasury and if you look at this chart that's as high as been since 1960's. The dividend paying stocks are very cheap, not just relative to other stocks but also relative to what you can achieve in a fixed income market over a very long term time period. You look at this chart you will see that the dividend pay out ratio which that's the percentage of earnings that companies pay out to share holders in the form of dividends over long periods of time going back to 1950's and 1960's, this average is about 50% to 60% of earnings that are actually pay out to share holders. It's currently at 28%. Even though the dividend is so high relative to the 10 year what this tells you is that American corporations have a lot of capacity to increase dividends if the outlook gets a little bit clearer. The problem is US corporate board rooms and heads of US corporations are in a defensive posture too. They are making plans right now for mid year 2013. They can't see over the cliff. There's a lot of uncertainty that is keeping America's capital markets but also America's economy in limbo. Although the Fed is trying to help with the monetization and keeping interest rates low by driving the ten year treasuries so low its driven the 30 mortgage rates low, that has helped housing but still until we get some clarification at the fiscal level, which is the deficit spending and all of these issues that tie out there at the end of the road in 2013, people don't feel very brave everyone is in a holding pattern. That's basically what we are looking at we should have more clarification before I come back next time but in the mean time we are in a pretty defensive position. There is a lot of good news out there. Corporate America is in the best position. If you look at the operating margins, cash on balance sheets, the pay down of debt on balance sheets Corporate America is lean and very profitable at this level. In August capital goods spending went down by 13%. That was a huge drop in August from July but those are big orders. That's sticking your neck out to buy capital goods. You can kind of see that America is still the best house in a bad neighborhood. What we're doing as far as our fiscal spending and deficit as a percent of GDP and everything else, we actually look like some of those European countries that you read about that have such terrible deficits. If you look at the US debt to total GDP we are running about 8% and we're this year going to 100% in terms of total debt to GDP, the first time since just after World War II. It's all about the fiscal situation and that needs to be cleared up and I think if they do arrive post election at some kind of long term fiscal plan that addresses these issues in a credible manner, America certainly posed to move forward but I think everyone is just waiting on Washington. Sondra Smith: Elaine the board had a question about a letter we received from Northern Trust and they didn't feel comfortable signing it until you look at it. Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 18, 2012 Page 12 of 13 Kim Cooper: We received this from another client too and Northern Trust has been instructed not to send these and it was sent in error. What they are asking for you to do is to be a representative client and be a referral. No, we don't want you to sign that. Sondra Smith: Another thing that is in your packet is the investment advisory agreement. If you have any questions or if you want to look over that while Elaine is still here. Elaine Longer: We are changing our investment contracts so that Longer Investments will no longer be voting proxy statements for any clients. The regulatory responsibilities related to doing that have really come to the point were it's just not feasible. What we are doing in the contracts is allowing clients to decide if they want to vote the proxies or do you want them to come to our office and they will just be shredded. Most of our clients are electing not to vote proxies but since this is a public pension board I don't know if you have to vote your proxies. I would have to defer to the City Attorney on that. Melvin Stanley: How soon does this have to be back? Elaine Longer: This can be completed by year end. We can wait for the attorney's opinion. Sondra Smith: So have Kit look this over and decide whether or not we need to vote proxy. Elaine Longer: Basically that is the decision, do you want to vote the proxies or do you want Longer Investments to continue to receive them but knowing that we will not be voting proxies. Jerry Friend: You think there may be some reason we have too. Elaine Longer: There may be. I would just rather, before you don't vote your proxies, it would be good for the city attorney to say. Sondra Smith: We will have to sign it one way or the other right, right? Elaine Longer: Yes. Sondra Smith: Everyone will need to come back by and sign before year end when we find out from Kit what we need to do. Elaine Longer: By the time I come back here in January 2013 we will know how all of this has settled out. Eldon Roberts: It will certainly be different when you come back one way or the other. Sondra Smith: Kim also in the packet is a copy of the actuarial report. Informational: 2013 Meeting schedule Policemen's Pension and Relief Fund Board of Trustees Meeting Minutes October 18, 2012 Page 13 of 13 Sondra Smith: Your 2013 meeting calendar is in your packet. Meeting Adjourned at 4:00 PM